Audit 411766

Finding 2025-003: Significant Deficiency - Internal Control and Compliance Over Procurement, Suspension and Debarment Program: COVID-19 - Coronavirus Capital Projects Fund Assistance Listing Number: 21.029 Pass-Through Agency: Wisconsin Department of Administration Pass-Through Agency ID: FFP 24 06 Criteria: In accordance with 2 CFR §§ 200.318 and 200.327, non-Federal entities must maintain written procurement procedures that comply with the Uniform Guidance procurement standards. These procedures must include written standards of conduct governing conflicts of interest, establish procurement methods consistent with the federal procurement thresholds and require price or rate quotations from an adequate number of qualified sources for small purchases exceeding the micro-purchase threshold. Condition: The Village's procurement policy does not comply with the procurement requirements of the Uniform Guidance. The policy does not include written conflict of interest standards applicable to employees, officers or agents involved in the selection, award or administration of contracts funded with federal awards. The policy does not establish a simplified acquisition threshold for formal procurement procedures, to align with the federal procurement methods established under the Uniform Guidance. The Village contracted with a third-party administrator who provided the appropriate services related to procurement for this grant program. Cause: Management has not updated the Village's procurement policy to incorporate the procurement standards required by the Uniform Guidance. Effect: Without procurement policies that comply with Uniform Guidance requirements, the Village is at increased risk of noncompliance with federal procurement regulations. This may result in questioned costs, disallowed expenditures, repayment of federal funds, audit findings or other enforcement actions by the federal awarding agency or pass-through entity. Questioned Costs: None noted. Recommendation: We recommend the Village revise and formally adopt a procurement policy that complies with 2 CFR Part 200. The policy should establish written standards of conduct that address organizational and personal conflicts of interest and update procurement thresholds to align with current federal procurement methods and thresholds. Views of Responsible Officials: Management agrees with the finding and will make efforts to implement a formal procurement policy.